Economic Calendar Analysis
This week, the top event of the week will be the announcement of the US Federal Reserve Federal Funds Rate at 18:00 GMT. The Fed is expected to hike its base interest rate from 5.00% up to 5.25%. A larger increase or no increase at all would cause a sharp adjustment of the value of the US Dollar. Subsequently all of financial markets would be impacted. Meanwhile, note that the Fed has stated that rate cuts are not going to happen in 2023.
The rate publication is scheduled to be followed by the Press Conference of the Chairman of the Federal Reserve Jerome Powell at 18:30 GMT. In most cases, comments made by the head of the central bank cause more volatility than the rate announcement. Sometimes, the comments of Powell reverse the direction of the USD.
In regards to the Fed decision, note that the head of the central bank has commented in the past that they monitor the PCE Core Inflation data. On Friday, the data set revealed that month on month the personal consumption expenditures increased by 0.3%.
After the Fed's decision, on Thursday, the European Central Bank is set to reveal its Main Refinancing Rate at 12:15 GMT. Currently, the ECB is expected to hike from 3.50% up to 3.75%, despite some policymakers insisting on 0.50% increase.
Just like Jerome Powell, the President of the European Central Bank Christine Lagarde is set to host a press conference at 12:45 GMT. In the case of the ECB, the Press Conference almost always reveals future direction of the Euro.
EUR/USD hourly chart
A recovery of the Euro against the US Dollar might face resistance in the 1.1000 mark and the 50 and 200-hour simple moving averages. Higher above, note the 100-hour SMA and the weekly simple pivot point.On the other hand, a decline of EUR/USD could look for support in 1.0900 and weekly S2 at 1.0891.
Hourly Chart
EUR/USD daily chart's review
On the daily candle chart, the pair has broken the channel up pattern, which has guided the rate up since early March. In general, the breaking occurred via sideways trading as the markets wait for the US Fed and European Central Bank rate announcements.Daily chart
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Traders are shorting
On Monday, trader open positions were bearish, as 66% of open position volume was in short positions.
Meanwhile, trader set up pending orders in the 100-pip range around the pair were 50%/50% to buy and sell the Euro against the USD.
On Tuesday, positions were 63% short and orders were 63% to buy.